Bitcoin (BTC) has been trying to break out of a descending trend for the past week and the first attempt on June 16 failed to break the $22,600 resistance. The second attempt at $21,400 on June 21 was followed by an 8% price correction. After two failed breakouts, the price currently trades below $20,000 and raises questions on whether $17,600 was really the bottom.
Bitcoin/USD 4-hour chart at Coinbase. Source: TradingView
The longer it takes for BTC to break from this bearish pattern, the stronger the resistance line becomes and traders are following the trend closely. That is precisely why it’s important for bulls to show strength during this week’s $2.25 billion monthly options expiry.
Regulatory uncertainty continues to weigh down on crypto markets after European Central Bank (ECB) president Christine Lagarde voiced her conviction on the necessity of tighter scrutiny. On June 20, Lagarde expressed her thoughts on the sector’s staking and lending activities: “[…] the lack of regulation is often covering fraud, completely illegitimate claims about valuation and very often speculation as well as criminal dealings.”
Bitcoin miners being forced to liquidate their BTC holdings is adding more negative pressure to BTC price and data from Arcane Research shows that publicly-listed Bitcoin mining firms sold 100% of their BTC production in May compared to the usual 20% to 40% in previous months. Collectively, miners hold 800,000 BTC, which creates concerns about a possible sell-off. The Bitcoin price correction drained miners’ profitability because the production cost has, at times, exceeded their margins.
The June 24 options expiry will be especially alarming for investors because Bitcoin bears are likely to profit by $620 million by suppressing BTC below $20,000.
Bulls placed their bets at $40,000 and higher
The open interest for the June 24 options expiry is $2.25 billion, but the actual figure will be much lower since bulls were overly-optimistic. These traders completely missed the mark after BTC dumped below $28,000 on June 12, but their bullish bets for the monthly options expiry extend beyond…..